German firms buoyant about China's growth

About 78 percent of German companies expect growth to be consistent in China in the next five years, while 54 percent plan to increase investments in the country, a survey published by the German Chamber of Commerce in China showed on Wednesday.

According to the Business Confidence Survey for 2023 and 2024, 79 percent of German companies said it is necessary to remain competitive in China.

The survey was conducted between Sept 5 and Oct 6 last year. A total of 566 member companies of the chamber responded to the survey.

About 42 percent of German companies expect positive industry development in 2024, compared to only 21 percent in 2023, as per the survey.

Ulf Reinhardt, chairperson of the board of the German Chamber of Commerce in China (South and Southwest China), said about 5 percent of the survey respondents currently regard Chinese companies as innovation leaders in their industry, but 46 percent foresee them becoming leaders within the next five years.

German business leaders said China's significance to the German economy remains unique.

As Germany's most important trading partner for seven consecutive years, the Sino-German economic relationship sustains millions of jobs in both countries, said Jens Hildebrandt, executive director of the German Chamber of Commerce in China (North China).

The enormous size of the Chinese consumer market, advanced supply chain infrastructure, and status as an increasingly strong innovator make China one of the most important markets for many German companies, Hildebrandt said.

The German Chamber of Commerce in China has more than 2,100 members, including Siemens AG, Mercedes-Benz Group, Covestro AG and Bayer Group.

Upbeat about the Chinese market, logistics conveying equipment manufacturer Beumer Group became the 500th German company to settle in Taicang, in East China's Jiangsu province, early this month.

The company plans to invest a total of 100 million euros ($108.74 million), with an annual output value of up to 1.4 billion yuan ($195.5 million) in Taicang, according to information released by the local government.

Since the arrival of the first German company in 1993, Taicang has attracted 500 German enterprises.

The first 100 German enterprises came to Taicang in a span of 14 years, but it only took two years for the last 100 German businesses to settle in the city.

To become a manufacturing powerhouse, China needs to not only increase efforts aimed at independent research and development but also collaborate with countries like Germany to identify gaps and learn from each other's strengths, said Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.

Both China and Germany have achieved significant success in cooperation in high-end manufacturing industries, not only in areas like household appliances, construction machinery and communication equipment, but also in fast-growing sectors such as chemicals, new energy and autonomous driving systems, he said.

Eager to enhance the country's strength in attracting foreign capital, China will roll out a package of measures this year to boost efforts in soliciting foreign investment. The government will work to solve existing problems that foreign businesses face in investing in its market, said Zheng Chiping, head of the National Development and Reform Commission's Department of Foreign Capital and Overseas Investment.

China has shifted its utilization of foreign investment from being solely focused on scale and speed to a more quality-driven approach.

The high-tech manufacturing sector has experienced rapid growth in attracting foreign investment, in line with industrial restructuring.

This reflects a continuous upgrade in China's utilization of foreign investment structures, said Sang Baichuan, dean of the University of International Business and Economics' Institute of International Economy in Beijing.

That sentiment is in line with the latest data.

China's high-tech industries attracted 423.34 billion yuan of foreign direct investment in 2023, accounting for 37.3 percent of the country's total utilized FDI, data from the Ministry of Commerce showed.